Buffett urges tax hike on wealthy, minimum tax on millionaires

Billionaire investor Warren Buffett is again urging Congress to raise tax rates on the wealthy, calling for the George W. Bush-era rates to expire for those making over $500,000 a year. 

Buffett reiterated his support for President Obama’s proposal to have the wealthy pay a greater share in an op-ed published Monday in The New York Times.

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"I support President Obama’s proposal to eliminate the Bush tax cuts for high-income taxpayers. However, I prefer a cutoff point somewhat above $250,000 — maybe $500,000 or so," Buffett writes in the op-ed.

Obama has proposed allowing the Bush-era rates to expire for incomes above $250,000 a year. 

Buffett's op-ed comes as legislators seek a deficit-reduction deal in order to avert the “fiscal cliff” of massive spending cuts and tax increases set to take effect in January.

Republicans have signaled an openness to including new revenues through shuttering loopholes and deductions, without tax-rate rises, if Democrats put entitlement reform on the negotiating table. 

Buffett, an Obama supporter, has long been a proponent of higher taxes on the wealthy. In 2011 he drafted an op-ed in the Times wherein he mentioned that his secretary paid a higher rate, even though her income was much less than his.

The Obama administration seized on Buffett’s editorial to push for raising the tax rate on millionaires, a proposal it dubbed the “Buffett Rule.”

The Buffett plan also recommends that lawmakers implement a 30 percent minimum tax on incomes between $1 million and $10 million, 35 percent on amounts above that level.

While most Republicans say they are opposed to raising rates, a number of GOP lawmakers who signed a pledge authored by Americans for Tax Reform President Grover Norquist not to raise taxes have signaled they might buck the pledge. 

On Sunday, Sen. Lindsey Graham (R-S.C.) said he would be willing to "violate" the pledge if that's what it would take for legislators to achieve a deficit-reduction deal. 

"I am willing to generate revenue," Graham said on ABC. But he added that he would "not raise tax rates to do it; I will cap deductions."

Republicans who oppose raising tax rates say that doing so could hurt job creation.

Buffett, though, dismissed that idea in his op-ed, claiming that raising the tax rates would not hurt the economy. 

“Let’s forget about the rich and ultrarich going on strike and stuffing their ample funds under their mattresses if — gasp — capital gains rates and ordinary income rates are increased,” wrote Buffett. “The ultrarich, including me, will forever pursue investment opportunities.”

Buffett also proposes that the federal government's goal should be to bring in revenues equal to 18.5 percent of the national gross domestic profit, while keeping spending at 21 percent of GDP.

"As the math makes clear, this won’t stem our budget deficits; in fact, it will continue them,” writes Buffett. “But assuming even conservative projections about inflation and economic growth, this ratio of revenue to spending will keep America’s debt stable in relation to the country’s economic output.

"In the last fiscal year, we were far away from this fiscal balance — bringing in 15.5 percent of GDP in revenue and spending 22.4 percent. Correcting our course will require major concessions by both Republicans and Democrats."